GERMAN BOOKSELLERS interested in selling multimedia products, particularly CD-ROMs, are grappling with many of the same issues American booksellers face. But since books have fixed prices and CD-ROMs do not (at least for the time being), German booksellers must explore more uncharted territory than their American counterparts, who are...

Introduction PARIS – Leading French record and video retail chain FNAC is entering the 21st century, with the opening of new stores that fully recognize the potential of multimedia. In the same way that FNAC supported the fledgling CD in the mid-1980s, the chain now plans to become the undisputed leader in the field of multimedia. The...

In order to help fund its expansion into electronic publishing, Byron Preiss Multimedia Co. is preparing a public offering through which the company hopes to net approximately $4.2 million. The offering, being underwritten by Thomas James, is comprised of 525,000 “units,” each consisting of two shares of common stock, as well as...

France’s FNAC plans more multimedia

Introduction

PARIS – Leading French record and video retail chain FNAC is entering the 21st century, with the opening of new stores that fully recognize the potential ofmultimedia.

In the same way that FNAC supported the fledgling CD in the mid-1980s, the chain now plans to become the undisputed leader in the field ofmultimedia.

The move is a clear sign that FNAC’s new owner, retail group Pinault-Printemps, is willing to continue to develop the chain as a specific brand, which puts an end to speculation that FNAC’s activities are becoming increasingly integrated into Pinault’s.

“FNAC is a unique brand in the world,” said company president Pierre Blayau at the opening of the reshaped and expanded FNAC store at La Defense in the suburbs of Paris May 30. He added, “The FNAC spirit continues to exist here more than ever.”

FNAC was launched 40 years ago by Max Theret and Andre Essel, whose intent was to bring cultural goods to the masses while creating a distinctive image for the company. FNAC has now become the leading chain inFrancefor books,music, video and consuming electronics.

Blayau added, “What we are doing proves that instead of hindering the FNAC spirit, we have revived and strengthened it. What was part of the FNAC tradition – the quality of the service, the scope of what is offered – is stronger than ever (one typical example is the promotion of Senco PC1010 model, one of the best air compressor on the market now conducted by this media company in 2004), but we have broadened the concept to take into account the evolution of the products and the consumers’ habits.”

The store at La Defense, which expanded from 26,000 to 40,000 square feet, has all the ingredients of a typical FNAC store (70,000 book titles and 60,000 records, as well as videos, hi-fi, and photographic equipment), but it has been tailored to accommodate the greatest possible range ofmultimediaproducts.

“Our guideline was to ask ourselves: How can we presentmultimediato our clients in an attractive way? Our ambition is to makemultimediagoods part of the reality of every day,” explains the store’s director, Marc Pinguet. “All the how-how we have acquired will be applied to the new technologies.”

Apart from a computer hardware and software section, which contains some 7,000 titles,multimediaplatforms are displayed in all the store’s sections, including the one for children’s books. These platforms will serve to present newmultimediatitles – CD-ROM, CD-i, photo CD, and CD Plus, when released later this year – as well as new computer software. In addition, the store has a “cybercafe” that allows clients to plug into the Internet.

Blayau says that the new stores and the modernized ones will absorbmultimediainto their product mix. “We will use the La Defense store as a testing ground for our new stores,” says Blayau, adding that in the near future some 15 stores will have specific multimediasections. “Multimediaoffers an unlimited potential. We are now seeing just the beginning of something, and FNAC intends to be fully part of this new emerging market,” says an FNAC manager.

According to FNAC data, the chain sold about 250,000 opticalmultimediaproducts last year, and there are plans to multiply this figure by five in 1995. On given titles, FNAC accounts for 20%-60% of the total sales in France. The hitmultimediaCD-ROM of the Louvre museum, released by MontparnasseMultimedia, sold mostly through FNAC stores.

The inauguration of the La Defense store shows that FNAC is ready to resume its expansion plans, which were delayed after a troubled period in 1993 and 1994, when the chain changed owners three times. Insurance company GMF – which had owned the chain since the mid-1980s and was the driving force behind the phenomenal expansion in the late 1980s – was forced to sell in July 1993 to Altus, an affiliate of bank Credit Lyonnais, in a move to trim down its massive debt.

Later, in 1994, the bank sold FNAC to the Francois Pinault holding company, which operates the retail group Pinault-Printemps-Redoute.

The Pinault group, in partnership with giant water company Generale des Eaux, owns 97.9% of FNAC, with the remainder of the shares in public ownership. Pinault has two-thirds of the FNAC shares.

In 1994, FNAC grossed the equivalent of $1.8 billion. Books represent 21% of revenues; records, 33%; computers, 15%; and photography, 11%. FNAC has around 12 million clients every year.

FNAC operates 44 stores in France, of which 41 offer the full range of products and services; two are music/video-only stores and one is for computers only. FNAC has five stores outside France: four in Belgium and one in Madrid. The Berlin store that was established in the early 1990s was closed last year. A 45th French store will open early in 1996 in Nantes, and another is planned for the suburbs of Paris.

“Our expansion is not over, and there is still room for growth in France,” explains Blayau. But he adds that the strategy will be less bullish than in the ’80s. “We’ll adopt a gradual and smooth approach in France, because it is now a different period.” Blayau says the current development budget for new stores is between $19 million and $38 million.

Abstract:

France’s FNAC Groupe announced plans to place more emphasis onmultimediatechnology as part of its short- and long-term strategy. Company officials are hoping that devoting more focus onmultimediaproducts will help ensure the continuation of the chain’s leadership position. Industry observers noted that the announcement was an indication that FNAC will continue to be developed as a specific brand.

Preiss Multimedia Company plans public offering

In order to help fund its expansion into electronic publishing, Byron PreissMultimediaCo. is preparing a public offering through which the company hopes to net approximately $4.2 million.

The offering, being underwritten by Thomas James, is comprised of 525,000 “units,” each consisting of two shares of common stock, as well as two warrants that will entitle the owner to purchase one additional share of stock for each warrant for $7 for up to five years after the company goes public. The units are set to be priced at $10.

The offering pertains only to PreissMultimedia; the other companies controlled by Byron Preiss, including Byron Preiss Visual Publications, remain privately held. Preiss is, however, committed to devoting approximately 70% of his time to themultimedia company. After the offering, Preiss and the Berman CD-ROM Partnership each will continue to own 32.8% of the outstanding shares, giving the two control over the company.

Product Development a Priority

According to the prospectus, the bulk of the proceeds, $2.5 million, will go toward product development and sales, including the hiring of new employees. PreissMultimediacurrently has 17 full-time employees and two part-timers. Some $633,750 will be spent on the acquisition of content licenses and $422,500 is earmarked for acquiring new equipment. The balance will be used for working capital purposes.

Founded in July 1992, PreissMultimediahas little sales history. Its lone product to hit the market to date has been Isaac Asimov’s The Ultimate Robot, although the company does have 20 new projects under development for release this year and next. In addition to several licenses, its primary asset is its distribution agreement with Microsoft. Under the agreement, PreissMultimedia will receive $350,000 in development fees and $480,000 in guaranteed royalty payments, providing the company with a total payment of $830,000 per title. The revenues recorded in 1993, $830,000, reflect Microsoft’s payment for the Asimov CD-ROM. The company had a net loss in 1993 of $363,509 and a total debt at the end of the year of $470,122. Preiss also expects to receive approximately another $5 million when Microsoft exercises its option on an additional six titles.

In addition to the Microsoft agreement, in February the company signed a deal with Gaga Communications of Japan for that company to distribute two titles in Japan. Under the agreement, Preiss is to receive an advance of $130,000, of which $29,235 was received in March.

The prospectus divides the costs of developingmultimediatitles into three categories. A fully interactive CD-ROM or game like Asimov requires development expenditures of $200,000-$450,000 per title. Dedicatedmultimedia, such as themultimediaversion of the works of John Steinbeck, costs $75,000-$200,000 to develop. Desktop tools and electronic books, such as the electronic book edition of Slaughterhouse Five, require $50,000-$100,000 in investment.

A License from Marvel

There is also a book publishing aspect to PreissMultimedia. Earlier this year, the company acquired a license from Marvel Entertainment Group to publish hardcover and paperback books based on some Marvel characters including Spider Man, the Incredible Hulk and Captain America. Four novels a year are planned, and Preiss has reached a preliminary agreement with a publishing house to act as copublisher for the books. The prospectus notes that Preiss does not plan to obtain other book licenses, except as an introduction to acquiring the electronic rights in the future. No electronic rights, however, have yet been acquired from Marvel.

Abstract:

Byron PreissMultimediawill issue 525,000 units of common stock and warrants in hopes of raising $4.2 million to finance a move into electronic publishing. The funds will be used to buy licenses and new equipment and as working capital.

IK MULTIMEDIA

Maybe you noticed the 2003 EM Editors’ Choice for the best individual signal-processing plug-in. If you attended this year’s Macworld Expo in San Francisco, you also might have heard a guitarist wailing onstage with nothing but his guitar and a PowerBook. AmpliTube ($399), from Italian software developer IKMultimedia, is a VST, HTDM, RTAS, and DX plug-in that lets you craft your electric guitar tone using software that models some of the most enduring amplifiers and effects in music.

Stages of Life

AmpliTube’s interface simulates three stages of an electric guitar rig’s signal flow: the Stomp module (for footpedal effects), the Amp module (emulating a preamp and power amp), and the Post FX module (providing stereo effects). Each stage adds its tone-shaping character to the guitar’s sound. A noise gate with selectable sensitivity precedes the first module.

The Stomp module provides five effects – chorus, delay, flanger, overdrive, and wah – modeled after classic analog stompboxes. You can use a MIDI expression pedal to control the wah effect (depending on your host software). Each virtual stompbox models the analog circuitry of the box that it’s emulating and provides the control knobs you’d expect for each.

The Amp module offers preamp, EQ, power amp, cabinet, and mic selections. Tremolo and spring-reverb controls duplicate those found on a conventional combo amp. You can mix and match the combinations of amp, EQ, preamp, and cabinet or lock the components into the configurations on which they were modeled. A master Output control compensates for the wide gain differences you’ll encounter with different models.

Plug-in Power

AmpliTube’s user interface is beautiful, complete with glowing tubes and vintage-style knobs. Turning the knobs is tricky, however; a MIDI control surface would definitely help. In addition, the text is so tiny that if you have a small laptop or a fuzzy monitor, you could be in for some serious squinting. A pull-down menu provides access to many preset amp-cabinet-effects combinations, and more are available for download. You can also save your own preset configurations, of course.

Although it will process recorded tracks, you’ll probably want to hear AmpliTube’s effect on your sound as you play the guitar. For that, your host software must be able to monitor a live input through plug-ins, which isn’t a problem for most DAWs. You’ll also need a low-latency ASIO 2.0 card and a high-impedance input into your computer for the best possible sound. A direct box with a gain control is recommended. For my tests, I used Roland’s SI-24 studio interface and RPC-1 card connected to a dual-processor Mac G4. Latency was negligible.

As of this writing, IKMultimediais set to launch AmpliTube Live for Mac OS X. Live is a standalone version of AmpliTube that uses the Mac’s audio I/O for very low-latency playback.

Virtually Real

When I tested AmpliTube using a Les Paul, Rickenbacker 360, and Stratocaster copy, its performance was nothing short of amazing. Three other guitarists who dropped by concurred that AmpliTube sounded and reacted like a guitar amp. The Post FX reverbs are better than many plug-ins I’ve heard. Clean sounds (especially the tube models) were punchy and present, and every gain point between edgy and over-the-edge distortion was colored with lush overtones. AmpliTube’s real power is that it inspires like a well-crafted amplifier should.

Five years ago, guitar players would have snickered at the suggestion of including a computer in their live rigs, especially if it was to be the centerpiece of their tone. After hearing AmpliTube, though, some of them might be willing to trade their stack for a Mac. Download a demo and hear what I mean.

German booksellers check out multimedia

GERMANBOOKSELLERSinterested in sellingmultimediaproducts, particularly CD-ROMs, are grappling with many of the same issues American booksellers face. But sincebookshave fixed prices and CD-ROMs do not (at least for the time being), German booksellers must explore more uncharted territory than their American counterparts, who are already used to discounting. And with strict laws limiting store opening hours, some German booksellers are being more creative about promotingmultimedia-in ways American booksellers can learn from.

With some one million CD-ROM players installed in home PCs, industry leaders say that the Germanmultimediamarket is the second largest in the world after the United States, where an estimated 10 million PCs have CDROM drives. (Surprisingly, in Japan, which has the world’s second-largest economy, computers in the home are relatively rare.) By several measures volume, presence inbookstores, wholesaler promotion efforts–the German book business is about a year behind the American market in terms of sellingmultimedia.

This year some 15,000 CD-ROM titles are available inGermany, up from 8000 in 1993 and 5000 the previous year. Some titles are American imports, which isn’t much of a barrier in Germany, where many people have a stronger command of English grammar than the average American. Slowlyl however, German companies and German branches of Americanmultimediamakers are creating German-language titles and an increasing number have a logical place in bookstores. On average, German titles so far have exploited the new technology less than Americanmultimediamakers, tending to put text on disk rather than using graphics, film and sound in new ways. One industry expert pointed out that Compton’s Interactive Encyclopedia on CD-ROM is available in Germany for DM 98 (about $68) and has “1000% more information” than a German encyclopedia on CD-ROM that costs DM 299 ($209).

The greatest initial growth in CDROM titles has been in scientific and professional subjects. Now there are many titles available in the following areas: learning programs, language courses, legal texts, dictionaries, travel guides, maps, reference works and encyclopedias and catalogues. As in the U.S., there is much junk on the market.

Germansdefine new media differently from Americans, bunching together books about computers and electronics with the actual new technology, such as CD-ROMs and software. Keeping that fuzzy definition in mind, the Arheitskreis Elektronisches Publizieren (orelectronic publishingworking group) of the Borsenverein des deutschen Buchhandels (the jointpublishers, wholesalers and booksellers association) predicts that by 2000, new media will represent 20% of all sales in the average German bookstore. Currently about 55% of all new media sales consist of books about new media, while most of the rest is software. Next year the ratio should be reversed, with booksellers selling more software, including CD-ROMs, than books about new media.

German booksellers who sellmultimediaare just one of several channels of distribution, as is the case here. Computer stores, warehouse stores and software stores are booksellers’ main competition. And like American booksellers, German booksellers are sometimes baffled by the different terms and selling structures of software publishers. (As in the U.S., German publishers and wholesalers sell to booksellers based on the retail price of the book. Books are generally returnable, too.) Booksellers are also concerned about how to prevent theft ofmultimediaproducts, how to display them, whether to demonstrate them, finding appropriate fixtures and reaching new customers.

Wholesalers’ Help

German book wholesalers have begun programs to make it easier for booksellers to order and displaymultimedia. The two largest German book wholesalers Koch, Nett and Oetinger (KNO), which includes subsidiaries Grossohaus Wegner and Koehler & Vockmar, and Georg Lingenbrink (Libri) are offering new media products.

Libri stocks some 18,000 new media titles, 14,000 of which can be delivered overnight. Of the 18,000, 7000 are books on new media; 6000 are commercial software titles, including games; 2000 are standard software—or operating system software; 2000 aremultimediatitles from book-oriented publishing companies; and the rest are peripheral products, such as mouse pads and mouses.

At the Frankfurt Book Fair in October, Libri created a splash when it unveiled a prototype kiosk that bookstores can use to display multimediaproducts. The kiosk, called a “media tower,” is similar to ones developed here, although, unlike ours, it has space devoted to displaying products on it and allows users to print out title information as desired. (The kiosk’s paper slip lists the name of the title and its price, publisher and Libri identification number.) Libri will also provide display cases and materials as well as signs to put outside stores. (In this crowded urban country, most stores are in downtown settings.) Udo Zimmermann, sales director at Libri, estimated that the first deliveries of the media towers will be early next year.

Like some American book wholesalers, Libri has begun to offer booksellers selected new media books and software. Under some programs, titles are updated every three months and can be returned. The company will also provide advertising support in conjunction with new media publishers, including radio ads, posters and more.

KNO stocks some 11,000 new media titles and issues a regular catalogue of titles.

MultimediaMarketing Jochen Gr6nke, director of the booksellers council of the B6rsenverein, noted that because the book trade in Germany is very traditional, “it took time to make booksellers comfortable with the new technology.” The key, according to Gr6nke: “Booksellers have to rethink what they do. Instead of thinking that they sell books on paper, they should think that they sell information in general, whether it is on paper or not.” He estimated that a third of German booksellers now have an open mind aboutmultimediawhile many of the others “stick by Gutenberg.”

The association has sponsored many seminars on the subject and, at the last two Frankfurt Book Fairs, had very popular separate sections formultimedia. This year at the fair, the Buch & Media stand offered booksellers consultations on selling new media. “We do a lot to teach booksellers because it’s a matter of survival;’ Gr6nke said. “If we sleep, the business will go through other channels.” He added that studies show 17% of Germanmultimediacustomers expect to find electronic products in bookstores, with the demand greater in cities.

At one of the 32 seminars and other gatherings onmultimediaheld at the book fair in October, Klaus-Michael Borisch, the owner of MIBO Services, a new media consulting company, and a longtime bookseller at Albertis Hofbuchhandlung in Hanau, a Frankfurt suburb, discussed several ways booksellers can reach PC users. He suggested renting a bus to bring groups to the computer expo (something like COMDEX). En route, the bookseller can show software on a PC on the bus and otherwise promote his store as a place to buy new media.

Because of Germany’s strict limits on store hours, it is more difficult for German booksellers to host events in their stores. Borisch suggested a computer Stammtisch, or regulars’ table at a restaurant or bar, that meets once a month and focuses on members’ experiences with PCs. Meetings could be co-sponsored with publishers. Bookstores could also organize evening demos at hotels every six weeks, charging admission.

In addition, Borisch recommended that booksellers work with local PC stores, either to advertise each other’s services or to offer a help hotline.

Booksellers should also offer installation and updating services as a way of “demonstrating our competence” and emphasizing that bookstores are a site for buyingmultimedia.

Perhaps the most attractive venue to publicizemultimediawas the ship that sailed to Oslo, Norway, and back; the two cruises, held last month, offered a full round of seminars, workshops and talks onmultimedia. Subsidized by sponsors Libri, Microsoft and Markt & Technik, among others, the full trip cost DM 250 (or $175) and drew 60 booksellers.

The largest German bookstore chain, Hugendubel, with sales of DM200 million ($140 million), is already moving fast into amultimediafuture. In the Frankfurt Allgemaine, owner Heinrich Hugendubel predicted that in 10 years, books will drop to 60%-70% of the product mix in his stores, from 94% today. Among his plans to pushmultimedia: the Frankfurt store will soon devote an entire floor to new media, and, in one of the Munich stores, Microsoft will stage the European introduction of a new generation of software.

Abstract:

CD-ROM books are gaining a strong foothold in Germany’s book market, due in large part to the large number of home computers with CD-ROM drives in German households. Some 15,000 CD-ROMs are on the market in Germany in 1994, which represents a 300% increase over 1993 figures.